Industry Briefs

Talisman sells non-core North American assets for $815 million

Talisman Energy agreed to sell nearly 16,000 boe/d of non-core North American assets for $815 million as part of a program to focus on core growth properties and extract value from non-strategic assets. Of the 16,000 boe/d sold, about 65% is natural gas and 1,300 b/d is conventional heavy oil. Proved reserves associated with the assets were estimated by third party engineers at approximately 38 MMboe. The assets were sold through 7 major transactions and a number of minor ones. Talisman was also able to retain approximately $170 million in tax pools connected with the properties. Talisman Energy Inc. is an independent upstream oil and gas company headquartered in Calgary, Alberta, Canada.

Cameron wins $110M Pyrenees contract, $110MVan Gogh contract

Cameron was awarded a contract worth nearly $110 million to provide 13 subsea trees, manifolds, and related equipment for BHP Billiton’s Pyrenees project offshore Northwest Australia. Initial equipment delivery and installation is scheduled for the fourth quarter of 2008, with additional deliveries of trees, manifolds, and associated equipment to continue through 2010. In addition, further expansion of the Pyrenees field beyond the initial 13 wells is expected in the future. Additionally, the company recently won a contract worth roughly $100 million to provide equipment for Apache Energy Ltd.’s Van Gogh project offshore Western Australia. Cameron will provide engineering and project management services, 13 wellhead and subsea tree systems, control systems, two subsea manifold structures with the associated flowline connection system and related equipment. Cameron provides flow equipment products, systems, and services to worldwide oil, gas, and process industries.

Marathon to acquire Western Oil Sandsfor $6.2 billion

Houston-based Marathon Oil Corp. has reached agreement to purchase Western Oil Sands Inc. for $6.2 billion. Western shareholders will receive $3.6 billion in cash and 34.3 million shares of Marathon common stock and securities exchangeable for Marathon common stock. Marathon will also assume Western’s $650 million debt at closing. The transaction is anticipated to close early in the fourth quarter of 2007. The acquisition requires Western to spin-off WesternZagros, its wholly-owned subsidiary with interests in Kurdistan, prior to closing. The AOSP Joint Venture also includes Shell Canada (operator, 60%) and Chevron Canada (20%). The oil sands mining operation encompasses the Muskeg River Mine, located north of Fort McMurray, Alberta, and the Scotford Upgrader, located near Edmonton, Alberta. Marathon’s legal advisor for this transaction is Bennett Jones LLP, and its financial advisor is Deutsche Bank Securities Inc. Marathon’s board also approved an additional stock buyback authorization of up to $2 billion. This is in addition to the previously announced stock buyback authorization of $3 billion. Marathon will use cash on hand, cash generated from operations, potential asset sales, or cash from available borrowing to acquire shares.

Sheridan closes $1.3Binvestment fund

Sheridan Production has closed Sheridan Production Partners LP, a specialized $1.3 billion fund that will invest in mature oil and gas assets located in diverse basins across the US. The fund will seek to acquire a portfolio of mature properties across the US and optimize operations through accelerated production, recovery enhancement, and additional capital.

Constellation Energy Partnersto acquire Cherokee basin properties for $240 million

Constellation Energy Partners LLC has agreed to acquire AMVEST Osage Inc., a subsidiary of AMVEST Corp., a privately-held company, for an aggregate purchase price of $240 million. AMVEST Osage owns producing and undeveloped oil and gas properties in the Cherokee basin in Oklahoma. Upon closing, AMVEST Osage will be merged into a CEP subsidiary. Constellation has also entered into a unit purchase agreement to sell in a private placement led by GPS Partners LLC and Lehman Brothers MLP Opportunity Fund LP, 2,664,998 of common units and 3,371,219 newly-created Class F units at an average price of $34.79 per unit to third party investors, for aggregate cash proceeds of $210 million. The proceeds, together with funds from the company’s revolving credit facility will fully fund the merger with AMVEST Osage Inc. Citigroup Global Markets Inc. acted as private placement agent to Constellation. Constellation Energy Partners is a limited liability company focused on the acquisition, development, and production of oil and natural gas properties, as well as related midstream assets.

Acergy SA awarded $125 million in contract work in Northern Europe

Acergy SA has been awarded 3 contracts in Northern Europe totaling roughly $125 million. The company has been awarded a contract in the North Sea for the installation of a hyperbarically welded hot tap into an existing 30” gas export pipeline. Statoil has awarded a contract to Acergy for the installation of a 16 kilometer well control umbilical, a production riser, DEH feeder cable, template, spool and associated structures, together with tie-in work. This installation is part of the infrastructure that will deliver production from the Alve field to the FPSO on the Norne field. Bluewater Industries awarded Acergy a contract for installation work on the Tristan NW field which includes the flowline, well control umbilical, tie-ins and pre-commissioning for a single gas well development.

Toreador sells USproperties for $19.1M

Continuing its policy of divesting non-core assets, Toreador Resources has entered into an agreement with RTF Realty Inc. of Dallas, to sell all of its US oil and gas properties for nearly $19.1 million in cash on an “as is, where is” basis. Net proceeds from the sale will be added to working capital and used for possible modest debt repayment, to fund the company’s ongoing development program in Turkey, and for other strategic initiatives. The US properties, which primarily consist of non-operated working interests in roughly 700 wells in 5 states, had proved reserves at the end of 2006 of nearly 700 thousand barrels of oil and 4.1 billion cubic feet of gas, or 1.4 million barrels of oil equivalent.

Well Renewal sellsleases for $1.8M

Well Renewal has entered into a letter of intent with USA Superior Energy Holdings Inc., a Houston-based oil and gas company, to sell its operating leases in Northeastern Oklahoma for $1.8 million.

Newfield Exploration to sell Oklahoma assets for $128 million

Newfield Exploration Co. will sell all of its coal bed methane assets in the Cherokee basin of northeastern Oklahoma to Constellation Energy Partners for $128 million. Current net production is roughly 10 MMcfd. The transaction includes more than 650 producing wells, Newfield’s interests in about 80,000 net acres, and a gas gathering system. Proceeds from these sales will be used to pay down debt and fund capital expenditures. Newfield Exploration Co. is an independent crude oil and natural gas exploration and production company.

BPI secures loan of up to $75 millionfrom GasRock

BPI Energy Inc. has closed on a senior secured advancing line of credit from GasRock Capital of up to $75.0 million. The line of credit comprises an immediate commitment of $10.2 million plus an additional capacity of up to $64.8 million that may be advanced by GasRock in its discretion, which is expected to be based on its quarterly reviews of BPI’s operations. Proceeds are expected to be used for continued development-well drilling at the Delta Project, drilling of new test wells, pilot projects, as well as lease acquisitions. Upon closing, GasRock has been assigned an overriding royalty interest of 1% in all leases currently controlled by BPI and an additional 4% ORRI in BPI’s existing wells. BPI will likewise assign GasRock a 4% ORRI in any wells drilled, worked over, or acquired while the loan is outstanding. BPI has a 100% working interest in 100% of its current acreage position. BPI Energy is an independent energy company engaged in the exploration, production, and commercial sale of coalbed methane (CBM) in the Illinois basin.

Chesapeake, Anadarko arrange West Texas venture

Oklahoma City-based Chesapeake Energy Corp. and The Woodlands, Tex.-based Anadarko Petroleum Corp. have completed multiple agreements, including a joint venture involving Chesapeake and Anadarko assets in the Deep Haley area of the Delaware basin in West Texas. Through the formation of a joint venture and other separate agreements, Chesapeake received: 25% of Anadarko’s existing Deep Haley area production; 25% of Anadarko’s leasehold in the central and eastern portions of the area; 50% of Anadarko’s leasehold and contractual rights in the western portion of the area; a lease from Anadarko on 2,100 net acres in the Fayetteville Shale play in Arkansas; an assignment of 5,600 net acres of undeveloped leasehold in the Anadarko Basin in western Oklahoma; and the Oklahoma City real estate assets gained by Anadarko as part of its acquisition of Kerr-McGee. Anadarko received: roughly $310 million in cash and other consideration, including reimbursement of capital expenditures previously incurred by Anadarko in connection with the development of the Deep Haley properties and Chesapeake’s commitment to fund a portion of Anadarko’s future Deep Haley area capital costs; and 50% of certain Chesapeake non-producing leasehold interests in Loving County, Tex. Anadarko and Chesapeake will jointly evaluate and explore more than 1 million gross acres in the Deep Haley area, on which drilling, completion, production and midstream operations will be shared on roughly a 50/50 basis.

EV Energy Partners to acquire properties in Permian basin

EV Energy Partners LP has signed an agreement to acquire, for $160 million, oil and natural gas properties in the Permian basin from Plantation Petroleum Holdings III LLC, an EnCap sponsored company. The acquisition is expected to close by the end of September 2007 and is subject to customary closing conditions and purchase price adjustments. EVEP plans to initially finance the acquisition with bank borrowings under an amended and restated credit facility. EVEP management will recommend an increase in the quarterly distribution rate. The acquisition is comprised of 142 wells (100% operated) in New Mexico and Texas. EVEP intends to hedge a substantial portion of the acquired production volumes prior to or at closing. Plantation’s advisors were Simmons & Co. International and Griffis & Associates LLC. EV Energy Partners LP is a master limited partnership engaged in acquiring, producing, and developing oil and gas properties.

Piper Resources enters equity financing agreement

Alberta, Calgary-based Piper Resources has entered into an equity financing agreement with Peters & Co. acting as lead agent and including JF Mackie & Co. Piper will issue, on a private placement basis, up to 21,875,000 Class A common shares at a price of $1.60 per share for gross proceeds of up to $35,000,000. Proceeds will be used to partially fund the acquisition of two private companies previously announced by Piper in June. Piper Resources Ltd. is a widely-held, non-listed exploration, development and production company pursuing conventional oil and natural gas opportunities in western Canada.

Halliburton acquires PSL Energy Services

Halliburton has closed the acquisition of the entire share capital of UK-based PSL Energy Services Ltd. Founded in 2003, PSLES is an eastern hemisphere provider of process, pipeline, and well intervention services, including flange management and bolting, leak testing, pre-commissioning services, hydrotesting, hydraulic workover, coiled tubing, slickline and wireline, and pumping services.

Gazprom chooses Total as Shtokman partner

Gazprom has chosen French Total SA as a foreign partner to implement the initial phase of Shtokman field development. The initial field development phase envisions production of 23.7 bcm of natural gas with the startup of gas supply via the pipeline due 2013, and liquefied natural gas production - 2014. To organize engineering, financing and construction activities within the framework of the project, a special-purpose company is to be established, and subsequently it will become the owner of the initial phase infrastructure. The stake of Gazprom in the new company’s authorized capital will be 75% and Total will hold 25%. If Gazprom reduces its stake and elects to retain another foreign partner, Gazprom will retain control over no less than 51% of the shares in the special-purpose company as well as 100% of the shares in the company - owner of the field license, and will also be the owner of the all hydrocarbons extracted.

Kodiak Energy acquires Thunder River assets

Kodiak Energy concluded a binding agreement to acquire 100% of the assets of Thunder River Energy Inc. for a purchase price of up to $27,000,000. The purchase price is comprised of $1,000,000 in cash and $26,000,000 in common shares issued at the previously agreed price of $2.00 per share. Six million shares will be subject to performance of the assets. The balance of the shares issued will be subject to the applicable restrictions under SEC regulations. In addition to Little Chicago, Thunder through its subsidiary, CIMA Holding Inc. - has 95% of 55,000 acres of P&NG leases in New Mexico. Natural gas potentials and commercial volumes of CO2 have been identified in existing wells on or adjacent to property - estimated at 587 bcf of CO2.

Proposed merger agreement terminated by Orion Ethanol, GreenHunter Energy

Orion Ethanol Inc. has mutually agreed with GreenHunter Energy Inc., to terminate the merger agreement dated May 30, 2007. The respective boards believe that it is not in the best interest of either company’s shareholders to proceed with the proposed merger. Orion Ethanol and GreenHunter Energy have left open the possibility of structuring a transaction between the companies at some later date. Orion Ethanol was formed in August 2006 and is a Pratt, Kan.-based ethanol company. GreenHunter Energy’s mission is to develop, acquire, and manage profitable renewable power and fuels assets.

Boots & Coots buys StrassCo for $10M

Boots & Coots has purchased StassCo Pressure Control LLC in Rock Springs, Wyoming, for nearly $10 million in cash. StassCo operates 4 hydraulic rig assist units in the Rockies’ Cheyenne basin. “Presence in the Rockies is a key to our strategy to expand North America land operations into prolific gas producing areas,” said Jerry Winchester, president and CEO.

Basic Energy adds nine newbuild rigs

Basic Energy Services Inc. has added 9 newbuild rigs and retired one rig, increasing its well servicing rig count to 379. Rig hours for the month of June 2007 were 68,500 producing a rig utilization rate of 79.1%, an increase from 73.3% in the prior month and a decrease from 92.5% in the same month in 2006. Drilling days reflect essentially full utilization of the 6 rigs in place for the month of June in west Texas. The 3 drilling rigs relocated from Vernal, Utah were in the process of being reconfigured for drilling in west Texas and were unavailable for work during June. Basic also increased its fluid service truck fleet by a net of two trucks, bringing its total to 659 trucks.

Habanero adds to its interest in Alberta oil sands

Habanero Resources Inc. has attained a 95% interest in 4 new Athabasca Oil Sands sections. These new sections are contiguous to an existing leases acquired earlier this year comprised of two sections. This gives Habanero 6 contiguous sections on this prospect. The block of 6 contiguous sections is located at 4-10-089 and covers the oil sands below the top of the Viking formation to the base of the Woodbend Group. Habanero is an emerging junior oil and gas company focused on developing and acquiring Alberta oil sands prospects.

Enterprise GP Holdings enters private sale of units for $750 million

Enterprise GP Holdings LP has agreed to sell 20,134,220 units representing limited partner interests to a limited number of investors, led by affiliates of Swank Capital LLC; GPS Partners LLC; funds managed by Zimmer Lucas Capital LLC; and Kayne Anderson Capital Advisors LP, in a private placement for a purchase price of nearly $750 million. The units were issued at a price of $37.25 per unit. Enterprise will use about $740 million from the placement to repay a portion of the debt incurred to fund the acquisition of units of Energy Transfer Equity LP and membership interests of its general partner, LE GP LLC. Lehman Brothers and Citigroup Global Markets acted as lead placement agents in the placement. Enterprise GP Holdings is a publicly traded GP partnership. It owns the general partner and limited partner interests in Enterprise Products Partners LP, TEPPCO Partners LP, and Energy Transfer Equity LP.

Tortoise Capital Advisors seeks investments for Tortoise Gas and Oil

Tortoise Capital Advisors LLC has formed Tortoise Gas and Oil Corp. With equity of $82.9 million before placement agents’ fees and expenses, and with expected leverage, the company expects to have over $100 million available for investments in energy producers. “We formed Tortoise Gas and Oil Corp. primarily to respond to the growing need by private and public US energy production partnerships for timely and flexible direct placement financing to fund internal growth projects and acquisitions,” said David Schulte, managing director of Tortoise Capital Advisors. “We intend to invest directly in privately-held companies and publicly-traded master limited partnerships operating primarily in the upstream segment, and to a lesser extent the midstream segment, of the energy sector.”

National Oilwell stakes claim in Indian oilfieldequipment company

National Oilwell Varco Inc. has acquired, through a wholly-owned subsidiary, a 76% stake in Sara Services and Engineers Private Ltd., a company in India, for a total cash purchase price of roughly $26 million. Sara Services fabricates, manufactures, and distributes oilfield equipment primarily in India, the Middle East, and the Far East. Sara Services also acts as a supplier to oil field equipment makers in the US. National Oilwell Varco designs, manufactures, and sells equipment and components used in oil and gas drilling and production operations.

China Holdings, Aroma International to develop storage facility

China Holdings Inc. has executed a memorandum of understanding with Aroma International Petroleum Co. Ltd. for a 50%/50% joint venture investment partnership with its wholly-owned subsidiary Aroma International Petroleum (China) to complete development of a 7.5 million barrel oil storage facility and its auxiliary facilities. Both parties agreed that Aroma International Petroleum Co. Ltd. will purchase nearly 30% of China Holdings by acquiring 70 million shares of common stock from the company’s treasury shares within one month at a price to be negotiated later. The MOU also provided China Holdings right of first refusal during the next 9 months for further development and investment in the joint venture investment partnership. The facilities, consisting of 2.2 square kilometers located in Yangkou Port, China, will require a total investment of about $235 million and completion is expected in roughly 2 years.